Answer Man: Leftover campaign money is money in the bank

Q. Isn’t it true that after a campaign, the balance of money raised for a candidate remains in control of that candidate? I think I read somewhere several years ago that an Illinois politician — Emil Jones, I think — began making himself “no-payback loans” from his campaign funds. Now, Hillary Clinton is expected to raise $2.6 billion for her second presidential race. What if she spends only $1 billion? What would happen to the other $1.6 billion? Are there any real restrictions on leftover campaign moey? I didn’t think politicians could spend them on themselves.

— M.D., of Columbia

A. For every rule, there’s usually an exception, and, as most people probably feel, there’s nobody better at finding an exception than politicians — especially when it benefits them.

Such is the case, many say, with the continuing effort to reform campaign financing, which has been going on since 1867 when Congress made it illegal for naval yard workers to be dunned for political contributions. I’m sure those of a certain age remember those heady days when candidates and office holders could do anything they wished with their leftover war chests.

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But in 1979, Congress amended the 1971 Federal Election Campaign Act to make it illegal for candidates to use excess campaign contributions for personal expenses. Ten years later, lawmakers stiffened the rules even more: They repealed a provision that allowed some of that money to used by lawmakers who had been covered by a grandfather clause.

OK, they’ve really got this airtight now, some may have thought. There’s not the slightest chance that candidates could tap into it any longer for, say, luxury football boxes or overseas vacations. Any unused money would either have to be kept for a future campaign or turned over to their political party to fund other candidates, it was assumed.

It didn’t turn out that way. According to campaign watchdogs, politicians created a loophole big enough to fly the old space shuttle through. While they still aren’t allowed to use leftover cash directly for their personal use, they can use the money to set up political action committees for other candidates and other causes. Many of these are called “leadership PACs,” and what the organizers do with the money going to these groups apparently is pretty much unregulated.

“It’s a political slush fund,” Trevor Potter, former chairman of the Federal Election Commission, told “60 Minutes” in 2013. “Over time, we’ve had them. They’ve been outlawed. They spring back in new guises, and this is the latest guise. Since they weren’t around when the ban on personal use was put into place, they’re not covered by it. They can be used for literally anything.”

In 2010, for example, the Center for Responsive Politics in Washington, D.C., looked at the campaign coffers of 25 U.S. senators and representatives who were retiring and had $31 million in cash on hand. Of those, 18 had set up leadership PACs bulging with a combined $850,000. Former Indiana Sen. Evan Bayh, for example, set up the All America PAC with $439,000 while New Hampshire’s Judd Gregg had stuffed $72,722 into his White Mountain PAC.

“There’s a wide gap, if not a gulf, between what lawmakers can do with regular campaign money versus leadership PAC money,” the CRP’s Dave Levinthal told ABC News at the time. “The question comes up: What can politicians do with the leftover PAC money, and the answer is pretty much whatever they want.”

Already in 2009, the FEC recommended that the prohibition of using campaign money for personal use should extend to all political committees, but nothing has been done yet.

Yet even ignoring leadership and similar PACs, there apparently are other creative ways that politicians can keep their other surplus funds all in the family. While they can’t legally use the money for personal spending, they can donate it to any charity set up under Internal Revenue Service rules.

This, of course, led to some interesting speculation after Massachusetts Sen. Ted Kennedy died, leaving $4.5 million in unspent campaign money. His family, for example, could have donated part or all of it to a number of charities — including the Edward M. Kennedy Institute for the United States Senate and the John F. Kennedy Presidential Library.

“Between these two sources of money, authorized campaign committee funds and leadership PACS, and considering that there are very minor restrictions, I would say that any retiring lawmaker with even an ounce of common sense can do just about anything they want with the unspent money,” Meredith McGehee, policy director at the Campaign Legal Center in Washington, D.C., told ABC.

As for your example of Emil Jones, your mind is as sharp as a tack. Under even looser Illinois laws, Jones, who retired in January 2009 after 36 years in the Illinois Senate, was allowed to tap into nearly $600,000 that was in his campaign account by June 30, 1998, the cutoff date to withdraw money from such an account for personal use. Since 1989, Jones has taken out at least $120,000 in personal loans. As you may know, his son, Emil Jones III, immediately took over dad’s 14th District senate seat in 2009.

So I’m sure what Hillary — and the Republican candidate, for that matter — does with any mint of leftover campaign cash will be fascinating.

Today’s trivia

For which sport did Los Angeles Dodgers pitching legend Sandy Koufax first earn a college scholarship?

Answer to Saturday’s trivia: Did you realize that more states entered the union while Benjamin Harrison was president than during any other chief executive’s reign? From 1889 to 1893, six states were added: North Dakota and South Dakota (Nov. 2, 1889), Montana (Nov. 8, 1889), Washington (Nov. 11, 1889), Idaho (July 3, 1890) and Wyoming (July 10, 1890). That topped both James Monroe and even the father of our country — George Washington — who each saw only five stars added to the nation’s flag during their terms.